System and methods for discount retailing

ABSTRACT

A system and methods to mutually satisfy a consumer with a discount and a vendor with a minimum number of sales by establishing a tipping point associated with an offer for a good or service. If the tipping point is met, the sale of the good or service is executed and the consumer is charged and receives an indication of the discounted sale, such as a certificate. If the tipping point is not met, the discount offer is abandoned and the consumer is not charged. Once the tipping point is established, the vendor receives a payment, even before the consumer uses the certificate. The system and methods also include a reward or loyalty program, an exchange or secondary market for the purchased deals, and a matching algorithm that matches customers to relevant goods or services.

PRIORITY STATEMENT

This application is a continuation-in-part of co-pending U.S. patentapplication Ser. No. 12/592,947 filed Dec. 4, 2009, entitled SYSTEM ANDMETHODS FOR DISCOUNT RETAILING, which was a regular filing ofprovisional application Ser. No. 61/215,453 filed May 5, 2009.

FIELD OF THE INVENTION

This invention relates generally to the offer and sale of goods andservices, and more specifically to a system and methods for offeringgoods and services of others at a discount on a network such as theInternet, wherein the sale of the goods and services is contingent upona certain number of actual sales, i.e., a tipping point, where themerchant ultimately providing the goods or services does not pay theout-of-pocket expenses for advertising and marketing the goods orservices, and receives the revenue generated from the sales of thediscounted goods or services before actually providing those goods orservices. Once the customer accepts an offer, payment information forthat offer is exchanged, but no payment is actually made. If and whenthe required number of offers are accepted, i.e., the tipping point,payment based on the payment information is completed.

The present invention contemplates a reward or loyalty program used inconjunction with the discount retailing system described herein. In theincentive or loyalty program, consumers are encouraged to collectpoints, which can then be redeemed for awards. Among other ways loyaltypoints can be collected, they can be based on the price of a discountoffer that a consumer purchases, for the purchase of certain goods orservices, the first time a purchase is made and for other reasons.

The present invention contemplates an exchange program in whichcustomers that have already purchased deals (or have collected loyaltypoints), can exchange those deals for money, loyalty or rewards pointsor other deals. Accordingly, the exchange or exchange program allowsmembers or groups of members to offer to sell or exchange their dealsfor money or other deals. Anything of value, including loyalty or rewardpoints can be exchanged. In order to accommodate the purchase, sale orexchange of deals, the present invention contemplates an exchange wherecustomers or members can list the deals they intend to sell (or buy) andother customers or members can make offers for the deals. The exchangesystem can check to make sure those selling or purchasing the deals havethe right to make such a sale or purchase. Further, the system can keeptrack of the transfer of ownership of the deal for validating deals andother reasons. In an alternative embodiment, instead of offering thedeals at the exchange for a specific amount, the potential purchaserscan bid on the deals to obtain the maximum amount (less than the fullprice) for the deal.

The present invention contemplates matching customers to relevant goodsor services in conjunction with the discount retailing system describedherein. By obtaining information about or from customers, includingtheir general demographic information, likes and dislikes, price rangethey are willing to spend, previous deals they enjoyed or did not enjoy,etc. offers can be made that are more relevant or pertinent to thatparticular customer and thus have a better chance of being accepted.

Information about the customer can be obtained in numerous ways,including a customer profile that is set up by the customer or thosethat know the customer, culled from previous deals that the customeraccepted, from the customer's ratings of those deals, customerquestionnaires or surveys, a database about the customers that wascreated from one or more of the above, or created elsewhere altogether.Once information about a particular customer is known, the deals thatare forwarded to that customer can be more relevant and more likelyaccepted.

Further, planning tools can be used to incorporate variables orrestraints thereby limiting or expanding the number of customers towhich a deal may be offered for various business reasons, such as nofewer than X customers or no greater than Y customers will be offered aparticular deal. By optimizing each deal across all customers or a groupof customers, these constraints can be used to attain the particularbusiness goals.

BACKGROUND OF THE INVENTION

Retailing is the exchange—sale and purchase—of goods and servicesbetween a vendor or merchant and a consumer or customer. Typically,negotiation is absent between the vendor and consumer with respect tothe terms of a sale or purchase of a good or service. Retailingcharacteristically employs a vendor-controlled format whereby the vendordetermines which goods or services to offer for sale, when the goods orservices will be offered for sale, and the non-negotiable fixed price atwhich the good or service will be sold.

Discounts are an integral part of retail strategies for many goods andservices. Vendors rely upon discounts for a variety of reasons, such asto promote new and existing goods and services and to increase the salesof that particular item or service, or to increase the sales of themerchant's other goods and services. Further, consumers rely upondiscounts as a way to reduce their costs.

Discount techniques include providing coupons and rebates to potentialcustomers, but these techniques have several disadvantages, such as ahistorically small percentage of consumer participation and fraud. Sincethe participation level is so small, merchants are forced to canvass anarea to attract the correct demographic of potential customers for itsproducts or services. Most of the coupons or rebates (or theadvertisements containing the coupons or rebates) end up with consumersthat do not need or want the goods or services.

Further, fraud is an increasing problem in that coupons may be copied,or rebates may be used to obtain cash back for goods and services thatthe fraudulent consumer never actually purchased.

Coupons and rebates are typically distributed using direct mail,newspaper print, and magazines and have associated with them a lowpercentage of users of those actually receiving the coupons. Besides notbeing environmentally friendly due to paper waste, coupons and rebatesmay not be cost effective.

Further, advertising and marketing associated with coupons and rebatescan be expensive when done through radio or television medium, andextremely ineffective when done through print advertisements. Regardlessof the advertising medium however, there is very little reason for theconsumer to pass along the advertisement or coupon to others, so that amerchant must advertise or market the discount to each individual.

A vendor offers coupons or rebates in the hopes of securing future salesat full retail prices, repeat sales and ultimately an increase inoverall sales. Ultimately, vendors cannot offer goods and services at adiscount unless the vendor can ensure a minimum number of sales tojustify the discount.

Discounting techniques also include pricing curve group discount models,but traditional pricing curve group discount models confuse consumersand leave them feeling like they did not get the best possible deal.

There is currently no system and methods to mutually satisfy theconsumer with a discount and the vendor with a minimum number of sales,while at the same time providing the merchant with expense-freeadvertising and marketing for the goods or services. There is also nosystem or methods that utilize the strength of a social network todistribute information about the discounts, and create an incentive forthe customer to distribute the information about the discount.

There is also no current system that pays the merchant for the sale ofthe discounted items sold up front, prior to the merchant having toprovide the goods or services to the customer that has paid for thosegoods or services. The present invention satisfies these needs.

SUMMARY OF THE INVENTION

The present invention is a system and methods to mutually satisfy theconsumer with a discount for the purchase of goods or services on theone hand, and the vendor with a minimum number of sales at thatdiscounted price. The minimum number of sales of the goods or servicesis also known as the tipping point.

The present invention also provides a merchant with inexpensive or freeadvertising and marketing of the particular goods or services beingoffered for sale, utilizing the strength of a social network, along witha guarantee that the sale price will only have to be honored if aminimum number of customers not only accept the offer, but also pay thediscounted price in advance, for the goods or services. Accordingly, amerchant can provide a greater or deeper discount knowing that at leasta certain number of sales will occur at that discount.

Since, in accordance with the present invention, the sales are made atthe time that the consumer decides to accept the offer, even beforetaking possession of the goods or receiving the services, and only ifthe minimum number of sales are attained, the money from the sales canbe immediately (or soon thereafter) provided to the merchant, therebyproviding the merchant with the revenue from the sale of the goods orservices in advance of the merchant providing the goods or services tothe customer.

The sale price may remain available for a limited time, for example,twelve hours or one day, or until the number of sales equals or exceedsthe minimum or tipping point by a given amount. For example, the tippingpoint may be reached when 100 individuals accept an offer to purchase adiscounted sandwich, and the offer ends when 200 individuals accept theoffer to purchase the discounted sandwich.

Further, the discount available may be modified as the number of actualcustomers increase. For example, the first 25 customers to purchase anitem may receive a 50% discount, while the next 25 customers for thatsame item receive a 40% discount, and so on. By creating theselimitations on the discounts as the number of deals are accepted (andpurchased); there is incentive for consumers to watch the dealscarefully to be able to react quickly.

According to the present invention, a merchant or vendor is selected forparticipation in discount retailing. The merchant may request to haveits goods or services offered, or the company providing the services cansolicit merchants to become part of the system. The vendor may be anyindividual or company that provides goods or services to a consumer, andmay be local, national or global. The merchant's goods or services areidentified for a discount offering and a minimum number of accepteddeals, or the tipping point, is determined. The tipping point is definedas the minimum quantity of the particular goods or services to beaccepted by the consumers, or the critical mass, in order to execute thesale of the goods or services. Typically, the vendor sets the tippingpoint.

Next, terms of the offer are determined and may include a discount orvarying discounts to be provided, duration of the offer, maximum number,if any, of the goods or services the vendor is willing to offer forsale, expiration of the goods or services, or any other restrictions orlimitation associated with the offer.

The discount offer is then exploited, either through a globalcommunication network, such as the Internet, or through some othervehicle that will be accessible to consumers, such as an Intranet, emailor another communication network. If the Internet is used, a website canbe generated and updated with the offer such that consumers can acceptthe offer. Consumers can “sign up” for offers on the website and even toreceive updates as they occur. “Signing up” may entail providing one ormore of the following types of information: the name of the consumer,address of the consumer, email address, and a form of payment topurchase the discount offer, such as a credit card or debit card.Although signing up is not necessary to participate in the offers (onecan accept an offer and provide payment information each time), bysigning up, the consumer can more easily and more quickly take advantageof any offer.

Consumer participation is received in the way of accepted offers, andcalculated in terms of the number of consumers that accepted thediscount offer. If the number of consumers that participated byaccepting the discount offer equals or exceeds the tipping point, thenthe offer of the sale of the good or service becomes valid orlegitimate, and each customer that has accepted the offer is chargedusing their method of payment, i.e., credit card, debit card, Paypal®,or in other ways utilizing a method of payment. The customer is thenprovided with a receipt of purchase, such as an email, coupon, giftcertificate, etc. that can be printed out for redemption (or used as areceipt on a cell phone, etc.).

At this time (or shortly thereafter), the merchant receives a paymentbased on the previous agreement for a portion of the sale of thediscounted goods or services, after taking out the cost charged by theowner of the system or platform.

The consumer can then take the printed receipt of purchase (or otherindication of purchase) to the merchant, who will provide the goods orservices purchased at the reduced price. Alternatively, the list ofcustomers that accepted the (now valid) offer and purchased thediscounted goods or services can be forwarded to the merchant forproviding the goods or services. These two methods for validate thepurchase can also be used in combination.

Conversely, if the number of customers that participated by acceptingthe discount offer does not reach the tipping point in the allottedtime, then the offer is rescinded or rejected, the consumer is notcharged for the purchase, and the merchant does not receive a payment(or have to provide the goods or services).

Customers can also sign up to receive an email when the deal isannounced, and can access the system through one of the many socialnetworking website systems, such as Facebook or Twitter. Further,customers can set up an account for purchasing the deals and receivecredits or money toward future deals by referring other customers tosign up and purchase a deal.

In an alternative embodiment of the present invention, an incentiveprogram or loyalty program is contemplated. The incentive programpromotes or encourages specific actions or behavior of customers orconsumers. According to the present invention, consumers collect andredeem points. Points are redeemed for one or more awards, such as goodsservices or other deals. It is contemplated that an award may bemonetary or non-monetary.

For purposes of this application, the loyalty or reward points termedherein as G-Points or simply Gs and are points collected which can bebased on a number of items, such as the price of a discount offer that aconsumer purchases, and the points termed herein as “Experience Points”or simply “Experiences” are points collected based on use of thediscount offer after purchase.

It is contemplated that Gs and Experiences may be collected for avariety of reasons such as repeat customer purchases of the discountoffer, the purchase of a certain good or service, the first time apurchase is made from a certain merchant or vendor, trying a new good orservice for the first time, number of purchases of the discount offerover time, number of visits to the website on the Internet providing thediscount offer, the number of visits to the vendor to fulfill thediscount offer, a purchase that matches the tipping point or a purchasethat exceeds the tipping point. There is no limit to the ways that acustomer uses to collect reward points or Gs. Other examples ofrewardable actions include marketing, advertising, or sharing deals withothers through various communication means, social networks or websites,such as email, Facebook, Twitter, etc.

Further, customers can be rewarded for other actions taken or evenrandomly, either periodically or from time to time. Top point earners(daily, monthly, annually, or cumulative) can be awarded additionalpoints or prizes, such as parties, etc. Each city or local region mayhave an award for point totals, etc. Also, Gs or points may be awardedfor reaching certain milestones, such as purchasing a certain number ofdeals within a set time frame. As an example, if a customer purchasesfive deals in a one month timeframe, that customer may receive 1000reward points. Numerous award levels and milestones can be used.

It is also contemplated that various terms of the points can be definedsuch as expiration and award. It is contemplated the points may eitherexpire within a certain time frame or are good until redeemed. The awardmay be ether monetary or non-monetary and the award further includescustomized levels at which points can be collected as well as customizedlevels at which points can be redeemed. For example, one point can becollected for every dollar spent. As another example, 50 points can beredeemed for a value of ten dollars or for 10% off. In one embodiment,points can be redeemed at an Internet store such as a merchant or vendorthat only accepts points in exchange for a good or service. Points or Gscan also be redeemed on the featured deal that day or in a secondarymarketplace that features recent or past merchants for the deal of theday. There is no limitation as to how a customer that has collected orobtained Gs or points can redeem those points.

In another embodiment of the present invention, the system and methodsof the present invention include an exchange program in which customersthat have already accepted an offer that has “tipped” or purchaseddeals, can exchange those deals for money, loyalty or rewards points (asdescribed herein) or other deals. Accordingly, the exchange or exchangeprogram allows members or groups of members to offer to sell or exchangetheir deals for money or other deals. As an example, if a customer haspaid $25 for a deal for $50 off at a Chinese restaurant and thatcustomer no longer plans to use that deal, the customer can sell thedeal for $20, such that the individual purchasing the deal pays $20 andgets $50 off of the meal. Otherwise, the two can exchange deals so thatone party receives a $50 deal at the Chinese restaurant and the otherparty receives a $50 deal for a massage. Anything of value, includingloyalty or reward points can be exchanged.

To accommodate the purchase, sale or exchange of deals, the presentinvention contemplates an exchange where customers or members can listthe deals they intend to sell (or buy) and other customers or memberscan make offers for the deals. As another example, a member that isabout to have a $40 manicure looks to the exchange to see if there areany deals for sale. Even if there is a deal for $30 (that originally waspurchased for $20), it is less than paying the full amount for themanicure.

In an alternative embodiment, instead of offering the deals at theexchange for a specific amount, the potential purchasers can bid on thedeals to obtain the maximum amount either less or more than the fullprice for the deal, depending on market conditions. Further, to providea validation and accounting system, the present invention can track thepurchase, sale and/or transfer of deals to record the new owner of theparticular deal transferred.

In another embodiment, the present invention contemplates matchingcustomers to relevant goods or services in conjunction with the discountretailing system described herein. By obtaining information about orfrom customers, including their demographic profile, likes and dislikes,price range they are willing to spend, previous deals they enjoyed ordid not enjoy, etc. offers can be made that are more relevant orpertinent to that particular customer and thus have a better chance ofbeing accepted.

Information about the customer can be obtained in numerous ways,including a customer profile that is set up by the customer or thosethat know the customer, culled from previous deals that the customeraccepted, from the customer's ratings of those deals, customerquestionnaires or surveys, a database about the customers that wascreated from one or more of the above, or created elsewhere altogether.Once information about a particular customer is known, the deals thatare forwarded to that customer can be more relevant to that customer andtherefore more likely accepted.

Further, the present invention contemplates better targeting of deals tocustomers and may offer one deal to a group of customers one day and adifferent deal to a different group of customers that same day. Also,based on information about the customers, the present inventioncontemplates offering a particular deal to one group of customers oneday and the same deal to a different group of customers a different day.As such, offering the same deal to different customers on different daysallows the demand to be properly managed for the benefit of themerchant, which also reduces or avoids a poor user experience. Forexample, the experience of a customer being prevented from getting areservation to a restaurant due to overwhelming demand from othercustomers.

Numerous deals may be offered to different or multiple groups at thesame or different times. The present invention contemplates that basedon historical action and certain customer's responses to an offer,additional customers may be given the same offer. For example, if agroup of customers is generated based on historical actions, and thatgroup tends to accept offers similar to another group of customers (thesecond group being generated based on ratings of various deals), then ifthe first group accepts an offer by a certain percent (for example 10%),then the same offer should be made to the second group.

There is no limitation on the number of groups or even if certaincustomers overlap into multiple groups (as long as they do not continueto receive the same offer multiple times; unless that is theirpreference). A computer program or algorithm using various filters andsubroutines can keep track of the customer groups and which customershave received which offers. In this manner, a test group (or multipletest groups) can be generated and receive an offer. If the test groupaccepts the offer in certain quantities, the offer is made to some orall of the other groups (or to everyone). If the test group does notrespond favorably by accepting the offer, the offer may be droppedaltogether.

An object of the present invention is to provide consumers with adiscount on goods and services, while providing the merchant inexpensiveor free advertising and marketing for those goods or services.

Another object of the present invention is to provide a guaranteedminimum number of sales of a particular item or service, otherwise nosale at that discounted price occurs—the sale only occurs if a minimumnumber of customers accept the deal.

Another object of the present invention is for the vendor to gainexposure to a new audience and create an incentive for the customer to,market the deal to other customers, and to provide a vehicle, such as awebsite on the Internet, in which large numbers of consumers return tothat particular vehicle to find out about new deals.

Another object of the present invention is to provide the merchant withrevenue from the sales (if the minimum is attained and the offer becomesvalid) prior to delivering the goods or providing the services to thecustomer.

Another object of the present invention is to provide a system andmethods for increasing sales, and advertising and marketing themerchant's goods or services.

Another object of the present invention is to provide an incentive orloyalty program to promote or encourage specific actions or behavior ofthe customers in order to collect and/or redeem points for monetary ornon-monetary awards.

Another object of the present invention is to provide a system andmethods for matching customers to relevant goods or services byobtaining information about customers and matching those customers tooffers that are more relevant or pertinent to that particular customerand thus have a better chance of being accepted. This embodimentprovides a more improved experience for the customer and an improvedquality of customer being referred to the merchant, which is necessaryfor repeat business and greater profitability.

Another object of the present invention is to provide a system andmethods for an exchange program in which customers that have alreadypurchased deals, can exchange those deals for money, loyalty or rewardspoints or other deals from other customers. The exchange or exchangeprogram allows members or groups of members to participate in offersthat have already ended, and to trade or sell offers that members willnot be able to redeem. This maximizes the customers' use of a particulardeal, and increases customer satisfaction.

These and other aspects, features, and advantages of the presentinvention will become more readily apparent from the attached drawingsand the detailed description of the preferred embodiments, which follow.

BRIEF DESCRIPTION OF THE DRAWINGS

The preferred embodiments of the invention will be described inconjunction with the appended drawings provided to illustrate and not tothe limit the invention, where like designations denote like elements,and in which:

FIG. 1 illustrates a flow chart in accordance with one embodiment of thepresent invention; and

FIG. 2 illustrates an exemplary computer system according to the presentinvention; and

FIG. 3 illustrates a flow chart in accordance with an alternativeembodiment of the present invention.

FIG. 4 illustrates a flow chart in accordance with one embodiment of theincentive program of the present invention;

FIG. 5 illustrates one embodiment of an on-line G-store where G-Pointscan be redeemed according to the present invention; and

FIG. 6 illustrates a personal account summary of the incentive programin accordance with one embodiment of the present invention.

DETAILED DESCRIPTION OF THE PREFERRED EMBODIMENT

FIG. 1 illustrates a flow chart 100 in accordance with one embodiment ofthe present invention. As shown in FIG. 1, a vendor is selected at step110 for participation in the present invention. The vendor may be anyindividual or entity that provides goods or services to a consumer. Thevendor may be local, national or global in terms of the geography thevendor provides products or services, and the vendor may be solicitedfor the system or may hear of the system and may approach the system'sprovider without being solicited. Additionally, a product or serviceprovided by the vendor is identified for a discount offering at step120. The good may be any product sold or distributed by the vendor, andthe service likewise, can be any service provided by the vendor.

A tipping point is then determined at step 130. Again, the tipping pointis defined as the minimum quantity of the good or service to be acceptedby consumers in order to execute the sale of the good or service.Typically, the vendor sets the tipping point. At step 140, terms of thediscount offer are determined and include discount to be provided,duration of the offer, for example 24 hours, and maximum number, if any,of the good or service the vendor is willing to offer, expiration of thegood or service, or restrictions associated with the good or service.

At step 150 the discount offer is exploited through a website on theInternet. Consumers participate by accepting the offer such as by“signing up” for the offer on the website. “Signing up” may entailproviding the name of the consumer; address of the consumer, and form ofpayment to purchase the offer. At step 160, the consumer participationis received and calculated in terms of the number of consumers thatparticipated by accepting the discount offer at step 170. As shown bystep 180 in FIG. 1, if the number of consumers that participated byaccepting the discount offer equals the tipping point established atstep 130, the sale of the good or service is executed at step 185. Ifthe number of consumers that participated by accepting the discountoffer does not equal the tipping point established at step 130, theoffer is abandoned. The sale of the good or service is executed byproviding the consumer with a gift certificate.

The following is discussed with reference to a restaurant discount of50%, but is merely exemplary. The present invention is applicable to avariety of goods, services and discounts.

Vendor XYZ Restaurant is selected to participate in discount retailingaccording to the present invention. XYZ Restaurant serves Chicago, Ill.and the Chicagoland area. The tipping point is established at 25, whichis the critical mass or minimum quantity that must be accepted byconsumers in order to execute the sale of the offer. So, if 24 peopleaccept the discount offer then the offer is abandoned and no consumerreceives the discount.

Next, terms of the discount offer are determined. The discount to beprovided by XYZ Restaurant is $20 in food for the cost of $10, providedthe tipping point of 25 is met. Another term is that the offer will runfor 8 hours, although any duration is contemplated. Another term may bethat XYZ Restaurant will only provide a maximum of 100 discount offers,although any variation is contemplated, for example, terms of thediscount offer could vary with respect to the number of consumers thataccept the offer in excess of the tipping point. For example, the first25 consumers that accept the discount offer receive the 50% discount.The subsequent consumers (number 26 through 50) to accept the offerreceive a 40% discount, or $20 in food for the cost of $12. The nextsubsequent consumers (number 51 through 100) to accept the offer receivea 20% discount, or $20 in food for the cost of $16.

Another term may be that, provided the tipping point is met, theconsumer must use the discount offer within two months otherwise itexpires. Any expiration date is contemplated including no expiration.Yet another term may be that the discount is applicable to food only,not beverages, but again, any restriction is contemplated such as thediscount only applies to alcoholic beverages.

Upon establishing the tipping point and determining the terms, thediscount offer is exploited through a website on the Internet. Consumersaccept the offer via the website and provide their name, address andcredit card number. Upon or before the 8 hour duration ends, consumerparticipation is received by the system and the number of consumers thataccepted the discount offer is calculated. In this example, 50 peopleaccepted the offer, which meets and exceeds the tipping point of 25.Therefore, the discount offer is realized and the sale of the service isexecuted. Each consumer's credit card is charged $10 and the consumerreceives a $20 gift certificate to XYZ Restaurant. Again, if the numberof consumers that accepted the discount offer is calculated at anynumber less than 25, the discount offer is abandoned and the consumer'scredit card is not charged.

An alternative embodiment of the present invention relates to anincentive or loyalty program used in conjunction with the discountretailing system. FIG. 4 illustrates a flow chart 400 in accordance withone embodiment of the incentive program of the present invention. When asale is executed (see step 185 in FIG. 1), purchase information isentered as shown by step 410. Purchase information includes adescription of the discount offer in terms of the good or service,quantity, price, and payment information. After purchase information isentered at step 410, it is submitted at step 420. After submission ofthe purchase information at step 420, it is determined if the purchaseinformation is accepted at step 430. If the purchase information in notaccepted at step 430, then the purchase information must be entered atstep 410. Purchase information may not be accepted, for example whencredit card information is invalid or the credit limit has beenexceeded. If the purchase information is accepted at step 430, thenpoints are collected at step 440. At step 450, the points are redeemed.

According to the preferred embodiment, two types of points arecontemplated: “G-Points” or simply “Gs” and “Experience Points” orsimply “Experiences”. Gs are points collected based on the price of theconsumer purchase. Experiences are points collected based on use of thediscount offer after purchase. For example, if a consumer purchases aservice such as a manicure from Vendor ABC and fulfills the offer byreceiving the manicure, then the consumer obtains one Experience Point.According to one preferred embodiment, Gs and Experiences have differentexpirations and awards. Gs never expire and continue to accrue in theconsumer's account while Experiences expire after a certain time period.

In one preferred embodiment, Gs are collected at a level of one pointper one cent such that a consumer purchasing the discount offer for fivedollars collects 500 Gs. Gs are also redeemed at a level of one pointper one cent such that a consumer redeems 500 Gs to purchase a discountoffer at five dollars. In one embodiment, Gs can only be redeemed at anInternet store such as a “G-store”, which is a merchant or vendor thatonly accepts points in exchange for a good or service. FIG. 5illustrates one embodiment of a G-store where G-Points can be redeemed.The G-store includes various goods and services for purchase usingG-Points. It is contemplated the G-store may include all or a portion ofprevious discount offers.

In one preferred embodiment, Experiences are collected at an award levelof a three-tiered ladder defined by three statuses: bronze, silver andgold. The consumer must fulfill discount offers by either receiving theservice or using the good to obtain an Experience Point. ThreeExperience Points achieve bronze status, five Experience Points achievesilver status and thirteen Experience Points achieve gold status.Although three, five and thirteen Experiences are discussed above, anynumber of Experiences are contemplated. Experiences are redeemed at alevel of percentage off the sale price depending on the rung of theladder achieved. For example, the bronze status is 10% off the saleprice, silver status is 15% off the sale price, and gold status is 25%off the sale price. Where G-point's can only be used toward the purchaseof goods and services at the G-store, the Experience Points can be usedtoward the purchase of goods and services of the discount offer.

FIG. 6 illustrates a personal account summary of the incentive programin accordance with one embodiment of the present invention. As shown,all G-Points and Experience Points collected are listed. Details on thecollection and redemption of the G-Points and Experience Points areprovided.

An alternative embodiment of the present invention is a deal exchange orexchange program that allows customers to exchange the deals that theyhave already purchased for money, loyalty points or for other dealsowned by other customers. The exchange provides a tool or secondarymarket for customers or members (or groups of members) to offer to sellor exchange their purchased deals for money or something of value.

As an example of the exchange program, if a customer has paid $25 for adeal for $50 off at a Chinese restaurant and that customer no longerplans to use that particular deal (either they do not like thatrestaurant, or the deal is getting ready to expire, or for any otherreason), the customer can offer to sell the deal for $20. If such a saleis consummated, the individual purchasing the deal pays $20 and gets $50off of the meal at the restaurant and the person selling the dealreceives something instead of letting the deal expire.

Alternatively, the parties can exchange purchased deals so that oneparty receives a $50 deal at the Chinese restaurant and the other partyreceives a $50 deal for a massage, or a $40 deal for drinks at a bar.Anything of value, including loyalty or reward points can be exchanged.

To accommodate the purchase, sale or exchange of deals, the presentinvention contemplates an exchange or market where customers or memberscan list the deals they intend to sell (or buy), and other customers ormembers can make offers for the deals. The market can be open toeveryone, to subscribers, or to a specified group such that only certainindividuals in that specified group are allowed to offer and/or purchasedeals.

As an example, a member that is about to have a manicure at Spa ABClooks to the exchange to see if there are any deals for sale for amanicure at Spa ABC. If the manicure cost $40, even if there is a dealfor $30 that might have originally cost $20, the individual purchasingthe deal pays less than the full amount for the manicure. As such, dealscan be purchased and put up for sale on the exchange for a profit withthe risk that no one will purchase the deal.

In another alternative embodiment, instead of offering the deals on theexchange for a specific amount ($30 in the example above for themanicure at Spa ABC), the potential purchasers can place the deal on theexchange and let others bid on that deal, thereby potentially obtainingthe maximum amount for the deal, but still less than the full price.

The exchange can incorporate numerous limitations on the purchase orsale of the deals. For example, the basic sale would include the salesprice and when the deal was set to expire. However, additionalinformation could include when the offer for the deal (not the dealitself) was set to expire, whether the deal was still valid, and reviewsor recommendations from others that had taken advantage of the deal,etc. The exchange could also allow the merchants themselves to placeadditional offers on the exchange. These offers and the others can beindexed to allow for quick searching of the deals.

The exchange can allow for various forms of payment or trading of deals.Besides the conventional credit card or Paypal payments, the loyaltypoints described herein can be accepted by the exchange and used for thetransaction. Further, the exchange may determine the value of the dealbased on various factors, such as original price, time for expiration,customer reviews, etc. and a one deal may have a different value thanthe other deal and trading may involve additional compensation, eitherthrough a credit card payment or loyalty points.

Upon payment or trade, the ownership of the deal can be immediatelytransferred from one party to the other, as long as each party is aregistered member of the discount retailing system, the exchange, orboth. The system of the present invention can record the transfer of thedeal from one member to the other for validation and accounting purposesat a later date if necessary. This transfer obviates any attempt for adeal to be redeemed twice. Further, the exchange may charge a varying orset amount for the listing, or charge a commission upon the sale andtransfer.

The present invention further contemplates each of the abovetransactions occurring on the customer's computer or mobile telephone.Applications for mobile telephone use can be created that would allowfor searching, purchasing and selling the deals for ease of use. Basedon the GPS functionality of various cellular telephones, deals (bothfrom the exchange and the discount retailing system) can be forwarded tomembers that are located near the place where the deal can be used. Withthis mobile application capability, a customer can access the system (orbe sent a message that there is a deal nearby), search or be informedabout a deal on a mobile telephone, purchase the deal, and walk into themerchant and obtain the goods or services.

In an alternative embodiment, the present invention includes a systemfor matching customers to goods or services that the customer would bemore interested in purchasing. For example, a deal for $25 worth ofalcohol at a sports bar in the Lincoln Park area of Chicago may be morerelevant to a 25 year-old male living in the city of Chicago, than to asuburban housewife with two kids that play soccer (although maybe not).The system can obtain information about customers, including theirresidence, age, income, education, likes, dislikes; along withinformation pertaining to the previous deals they purchased, whetherthey enjoyed or did not enjoy those deals, etc. Once that information isentered into a database, more relevant offers can be made to aparticular customer with a better chance of being accepted.

There are numerous ways that this information can be obtained; somedirectly from the customer and some from other sources. The customer canset up a customer profile at the time membership is commenced withupdates to this information happening periodically. Further, those inthe customer's group (if one is set up) can provide information andinformation can be culled from previous deals that the customer acceptedand possibly rated. Also, customer questionnaires or surveys can be usedto populate the customer database.

Once information about a particular customer is known, the deals thatare forwarded to that customer can be more relevant and more likelyaccepted.

Further, the discount retailing system may offer one deal to a customeror group of customers one day, and a different deal to a differentcustomer or group of customers that same day.

Based on information about the customers or the group of customers, itmay be more advantageous to offer a particular deal to one group ofcustomers one day, and the same deal to a different group of customerson a different day. As such numerous deals may be offered to differentor multiple groups at the same (or different) times. The retailingsystem can utilize historical data to determine that based on certaincustomer's responses to an offer, additional customers may be given thesame offer. For example, if a group of customers is generated based onhistorical activity, and that group tends to accept offers similar toanother group of customers (the second group being generated based onratings of various deals), then if the first group accepts an offer by acertain percent (for example 10%), then the same offer should be made tothe second group. The retailing system can make these determinations onthe fly as deals are accepted or rejected.

There is no limitation on the number of groups or even if certaincustomers overlap into multiple groups (as long as they do not continueto receive the same offer multiple times). A computer program oralgorithm using various filters and subroutines can keep track of thecustomer groups and which customers have received which offers. In thismanner, a test group (or multiple test groups) can be generated andreceive an offer. If the test group accepts the offer in certainquantities, the offer can be made to some or all of the other groups (orto everyone). If the test group does not respond favorably by acceptingthe offer in enough quantity (different from the tipping point describedabove), the offer may be dropped altogether.

FIG. 2 illustrates an exemplary computer system 200, or networkarchitecture, that may be used to implement the methods according to thepresent invention. One or more computer systems 200 may carry out themethods presented herein as computer code. One or more processors, suchas processor 220, which may be a special purpose or a general-purposeprocessor is connected to a bus 210. As shown in FIG. 2, bus 210connects the processor 220 to various other components of the computersystem 200, but it is contemplated bus 210 may connect processor 220 tocomponents (not shown) such as, sensors, and servomechanisms. It is alsocontemplated that bus 210 connects the processor 220 to other computersystems. Via the bus 210, the processor 220 can receive computer code.The term “computer code” includes, for example, programs, instructions,signals and/or data. The processor 220 executes computer code and mayfurther send the computer code via the bus 210.

Computer system 200 may include one or more memories, such as firstmemory 230 and second memory 240. It is contemplated that the firstmemory 230, secondary memory 240, or a combination thereof function as acomputer usable storage medium to store and/or access computer code. Thefirst memory 230 and second memory 240 may be, for example, randomaccess memory (RAM), read-only memory (ROM), a mass storage device, orany combination thereof.

As shown in FIG. 2, one embodiment of second memory 240 is a massstorage device 243, although it is contemplated that first memory 230may be the mass storage device. The mass storage device 243 comprises astorage drive 245 and a storage media 247. It is contemplated thestorage media 247 may or may not be removable from the storage drive245. Mass storage devices 243 with storage media 247 that are removable,otherwise referred to as removable storage media, allow computer code tobe transferred to and/or from the computer system 200.

A mass storage device 243 may include, for example, a Compact DiscRead-Only Memory (“CDROM”), ZIP storage device, tape storage device,magnetic storage device, optical storage device,Micro-Electro-Mechanical Systems (“MEMS”), nanotechnological storagedevice, floppy storage device, hard disk device. Mass storage device 243also includes program cartridges and cartridge interfaces (such as thatfound in video game devices), removable memory chips (such as an EPROM,or PROM) and associated sockets.

The computer system 200 may further or alternatively include other meansfor computer code to be loaded into or removed from the computer system200, for example, input/output (“I/O”) interface 250 and/orcommunications interface 260. Both the I/O interface 250 and thecommunications interface 260 allow computer code to be transferredbetween the computer system 200 and external devices including othercomputer systems. This transfer may be bi-directional or omni-directionto or from the computer system 200.

Computer code transferred by the I/O interface 250 and thecommunications interface 260 are typically in the form of signals, whichmay be electronic, electromagnetic, optical, or other signals capable ofbeing sent and/or received by the interfaces. These signals may betransmitted via a variety of modes including, but not limited to, wireor cable, fiber optics, a phone line, a cellular phone link, infrared(“IR”), and radio frequency (“RF”) link.

The I/O interface 250 may be any connection, wired or wireless, thatallows the transfer of computer code. An I/O interface 250 includes, forexample, an analog or digital audio connection, digital video interface(“DVI”), video graphics adapter (“VGA”), musical instrument digitalinterface (“MIDI”), parallel connection, PS/2 connection, serialconnection, universal serial bus connection (“USB”), IEEE1394connection, PCMCIA slot and card. In certain embodiments the I/Ointerface connects to an I/O unit 255 such as a user interface, monitor,speaker, printer, touch screen display, to name a few.

The communications interface 260 is also any connection that allows thetransfer of computer code. Communication interfaces include, but are notlimited to, a modem, network interface (such as an Ethernet card), wiredor wireless systems (such as Wi-Fi, Bluetooth, and IR), local areanetworks, wide area networks, intranets, etc.

The invention is also directed to computer products, otherwise referredto as computer program products, to provide software that includescomputer code to the computer system 200. Processor 220 executes thecomputer code in order to implement the methods of the presentinvention. As an example, the methods according to the present inventionmay be implemented using software that includes the computer code,wherein the software is loaded into the computer system 200 using amemory 230, 240 such as the mass storage drive 243, or through an I/Ointerface 250, communications interface 260, or any other interface withthe computer system 200. The computer code in conjunction with thecomputer system 200 described herein may perform any one of, or anycombination of, the steps of any of the methods presented herein. It isalso contemplated that the methods according to the present inventionmay be performed automatically, or may be invoked by some form of manualintervention.

The computer system 200, or network architecture, of FIG. 2 is providedonly for purposes of illustration, such that the present invention isnot limited to this specific embodiment. It is appreciated that a personskilled in the relevant art knows how to program and implement theinvention using any computer system or network architecture.

A flow chart 300 representing an alternative embodiment of the presentinvention is illustrated in FIG. 3. Similar to the flow chart in FIG. 1,a vendor is selected or obtained at step 310 for participation in thepresent invention and a good or service is identified for the process instep 320. In the alternative embodiment, no tipping point isestablished, however, in step 340, terms of the discount offer aredetermined and include the discount to be provided, duration of theoffer, for example 24 hours, and an expiration date of the offer, orother restrictions associated with the offer.

At step 350 the discount offer is exploited through a website on theInternet or on some other global communication network. Consumersparticipate by accepting the offer such as by “signing up” for the offeron the website. “Signing up” may include providing the name of theconsumer, address of the consumer, and form of payment to purchase theoffer. The consumer may have already entered personal information thatis stored thereby obviating the need to sign up each time to receive anoffer. However, the system must be able to track the individualaccepting the offer so that the consumer can be charged appropriately atthe correct time, which may be when a deal reaches a tipping point (if atipping point is used), or as soon as the consumer accepts the offer, ifthere is no tipping point.

At step 360, the consumer participation is received by the system and instep 370, the system calculates the number of consumers that haveaccepted the discount offer. This calculation can be done on a rollingbasis, or at the end of the time limit, which was determined in step340. Once the offer is accepted by the consumer and the consumer hasbeen charged for the sale of the good or service, the consumer receivesan indication that will allow him or her to receive the product orservice. For example, the consumer may receive a gift certificateindicating the discount offer.

Once the number of consumers accepting the offer has been calculated andthe consumers have been charged in step 385, a vendor payment can bemade in step 390. The calculation and payment can occur at the end ofthe deal, based on a time limit, or the calculation can occur at anumber of different time intervals, with numerous checks being sent tothe vendor.

The described embodiments are to be considered in all respects only asillustrative and not restrictive, and the scope of the invention is,therefore, indicated by the appended claims rather than by the foregoingdescription. Those of skill in the art will recognize changes,substitutions and other modifications that will nonetheless come withinthe scope of the invention and range of the claims.

1. A method of discount retailing in which an offer does not becomevalid until a minimum number of offers are purchased and in whichcustomers are allowed to collect reward points to be redeemed topurchase additional offers or other awards, comprising a network server,a microprocessor, a memory and computer software, said computer softwarebeing located in said memory and run by said microprocessor, saidcomputer software comprising a discount retailing algorithm, whereinsaid discount retailing algorithm comprises the steps of: (a) obtainingconsent from a merchant to market and advertise an item normallyprovided by said merchant at a standard offer price; (b) determining adiscount offer price for said item, said discount offer price being areduction in amount from the standard offer price of that item; (c)deciding on a tipping point at which time the discount offer pricebecomes valid; (d) generating an advertisement to present said discountoffer price and said tipping point to potential consumers; (e)displaying said advertisement over a network through said network serverfor a predetermined period of time for potential consumers to review;(f) receiving acceptances of the discount offer price for the item overthe network for the predetermined period of time; (g) determining if thetipping point has been attained; (h) informing each consumer thataccepted the discount offer whether or not the tipping point has beenattained; (i) providing reward points to consumers based on consumeractivities; and (j) allowing each consumer to redeem said reward points.2. The method of discount retailing of claim 1, wherein consumeractivities include accepting a discount offer price for an item in whichthe tipping point has not been attained.
 3. The method of discountretailing of claim 1, wherein consumer activities include accepting adiscount offer price for an item in which the tipping point has beenattained.
 4. The method of discount retailing of claim 1, whereinconsumer activities include accepting a discount offer price andredeeming that discount offer at the merchant.
 5. The method of discountretailing of claim 1, wherein consumer activities include acceptingmultiple discount offers.
 6. The method of discount retailing of claim1, wherein consumer activities include providing remarks after acceptinga discount offer and redeeming said discount offer at the merchant 7.The method of discount retailing of claim 1, wherein consumer activitiesinclude communicating with other consumers about a discount offer. 8.The method of discount retailing of claim 1, wherein redeeming saidrewards points includes using said reward points to reduce the cost ofanother discount offer.
 9. The method of discount retailing of claim 1,wherein redeeming said rewards points includes using said reward pointsto purchase a good or service from a merchant that has previouslyprovided a discount offer.
 10. The method of discount retailing of claim1, wherein redeeming said rewards points includes using said rewardpoints to purchase a discount offer for which the time to purchase theoffer has expired.
 11. A method of discount retailing in which an offerdoes not become valid until a minimum number of offers are purchased andin which a customer is allowed to exchange, trade or sell previouslypurchased offers, comprising a network server, a microprocessor, amemory and computer software, said computer software being located insaid memory and run by said microprocessor, said computer softwarecomprising a discount retailing algorithm, wherein said discountretailing algorithm comprises the steps of: (a) obtaining consent from amerchant to market and advertise an item normally provided by saidmerchant at a standard offer price; (b) determining a discount offerprice for said item, said discount offer price being a reduction inamount from the standard offer price of that item; (c) deciding on atipping point at which time the discount offer price becomes valid; (d)generating an advertisement to present said discount offer price andsaid tipping point to potential consumers; (e) displaying saidadvertisement over a network through said network server for apredetermined period of time for potential consumers to review; (f)receiving acceptances of the discount offer price for the item over thenetwork for the predetermined period of time; (g) determining if thetipping point has been attained; (h) informing each consumer thataccepted the discount offer whether or not the tipping point has beenattained; (i) allowing consumers to display an accepted discount offerto other consumers for purchase or trade; (j) providing for saidconsumer displaying said accepted offer for purchase or trade tocommunicate with said other consumer desiring to purchase or trade forsaid accepted offer; and (k) allowing said consumer to transferownership of said accepted discount offer to said other consumer. 12.The method of discount retailing of claim 11, wherein said displayingsaid accepted discount offer for purchase or trade includes a websitethat lists all of the accepted discount offers that consumers desire totrade or sell.
 13. The method of discount retailing of claim 11, whereinsaid transfer of ownership from one consumer to said other consumer ischecked for validity of the ownership of said accepted discount offer.14. The method of discount retailing of claim 13, wherein a record ofsaid transfer of ownership is retained and can be accessed at a laterdate for accuracy.
 15. A method of discount retailing in which an offerdoes not become valid until a minimum number of offers are purchased andin which information about a customer is collected in order to match acustomer to particular offers, comprising a network server, amicroprocessor, a memory and computer software, said computer softwarebeing located in said memory and run by said microprocessor, saidcomputer software comprising a discount retailing algorithm, whereinsaid discount retailing algorithm comprises the steps of: (a) obtainingconsent from a merchant to market and advertise an item normallyprovided by said merchant at a standard offer price; (b) determining adiscount offer price for said item, said discount offer price being areduction in amount from the standard offer price of that item; (c)deciding on a tipping point at which time the discount offer pricebecomes valid; (d) generating an advertisement to present said discountoffer price and said tipping point to potential consumers; (e)displaying said advertisement over a network through said network serverfor a predetermined period of time for potential consumers to review;(f) receiving acceptances of the discount offer price for the item overthe network for the predetermined period of time; (g) determining if thetipping point has been attained; (h) informing each consumer thataccepted the discount offer whether or not the tipping point has beenattained; (i) obtaining information about a customer; and (j) matchingsaid customer to a particular discount offer based on the informationobtained about said customer.
 16. The method of discount retailing ofclaim 15, wherein said information includes what the customer prefers.17. The method of discount retailing of claim 15, wherein saidinformation includes what the customer does not prefer.
 18. The methodof discount retailing of claim 15, wherein said information includes aprice range for which that customer is willing to accept a discountoffer.
 19. The method of discount retailing of claim 15, wherein saidinformation includes any previous discount offers that said customerpreferred.
 20. The method of discount retailing of claim 15, whereinsaid information includes any previous discount offers that saidcustomer did not prefer.
 21. The method of discount retailing of claim15, wherein said obtaining information about a customer includesallowing said customer to create a profile.
 22. The method of discountretailing of claim 15, wherein said obtaining information about acustomer includes allowing said customer to answer a questionnaire orsurvey.
 23. The method of discount retailing of claim 15, wherein saidobtaining information about a customer includes obtaining informationabout said customer from external sources.